By Jonathan Stempel
NEW YORK (Reuters) - A New York state appeals court rejected Fox News' bid to dismiss a multibillion-dollar defamation lawsuit accusing the network of falsely accusing an electronic voting systems company of helping rig the 2020 U.S. presidential election to favor Joe Biden over Donald Trump.
In a 5-0 decision, the Appellate Division in Manhattan said Smartmatic USA alleged in "detailed fashion" how Fox News and some anchors and guests "effectively endorsed and participated in (defamation) with reckless disregard for, or serious doubts about" whether the company engaged in election fraud.
Smartmatic had sought $2.7 billion in damages, saying Fox News knowingly lied about its technology and how it was used in order to boost ratings, and keep Trump supporters from defecting to the right-wing networks Newsmax and One America News.
Fox News has long said its job was to inform the public, and that airing fraud claims was protected by the U.S. Constitution's First Amendment.
Tuesday's decision lets Smartmatic continue its cases against Fox News, host Maria Bartiromo and former host Lou Dobbs.
It also reinstated some previously dismissed claims against Rudolph Giuliani, the former New York City mayor who worked as a Trump lawyer, and Smartmatic's case against host Jeanine Pirro.
Fox News, whose lawyers also represented the hosts, said it expected to prevail in the lawsuit.
"There is nothing more newsworthy than covering the president of the United States and his lawyers making allegations of voter fraud," it said. "Freedom of the press is foundational to our democracy and must be protected, in addition to the damages claims being outrageous, unsupported, and not rooted in sound financial analysis."
Giuliani's lawyer could not immediately be reached for comment.
Smartmatic has said it provided election technology only to Los Angeles County, which Biden won.
"We look forward to holding Fox News and the other defendants accountable in court," its lawyer J. Erik Connolly said.
Tuesday's decision upheld much of a March 2022 ruling by state Supreme Court Justice David Cohen.
Another voting technology company, Dominion Voting Systems, is pursuing a similar $1.6 billion lawsuit against Fox News in Delaware.
The case is Smartmatic USA Corp et al v Fox Corp et al, New York State Supreme Court, Appellate Division, 1st Department, No. 2022-01291.